Myth #4 – I’ll build wealth once I’m debt free

I’m going to share an observation that I’ve learnt from my most successful clients for over 15 years. You don’t build property wealth by reducing debt. You do it by holding assets that grow in value.

Why is it then that there’s an entire industry devoted to debt repayment? We consistently see people who’ve paid around $5k to ‘enable’ themselves to find that whilst the program works great, the success of it’s entirely dependent on who you were to begin with! A templated cookie-cutter approach to personal finance never works, and here’s why:

1 – You and your partner are unique. How could a ‘one-size fits all’ solution really enable me to do succeed? A templated, scalable process is great for building a business, but shouldn’t act as a proxy for your success
2 – It relies on you exercising self-control, and this is something we’re not that great at let’s be honest! Heck, if self-control worked we’d all be priests by now!

If you own your own home and you want to grow wealth, before you start reducing your mortgage any faster I really do believe there’s another option to consider first. Time’s too short to get around to investing later on.

‘I’ll start building wealth once I’m debt-free’ Really?! – We’ve seen many clients who refrain from repaying debt in favour of acquiring more assets sooner, and they actually do far better.

So where should the focus be?
1 – It’s not about taking away, it’s about adding to. What could you do more of, to get what you want? When you re-map some of the beliefs around spending, it becomes an easy job.
2 – Self-discipline is not a cure for your appetite and should therefore not be the focus. How can we work with who you already are to motivate and inspire you to do great things? Oz never did give nothing to the Tin Man That he didn’t, didn’t already have.- America wrote this song in 1974
3 – Just like the Tin Man, YOU have the answer! You need someone to help draw it out you, but you run your OWN race. Don’t pay a huge fee to someone to ‘keep you accountable’ on a debt-reduction program – Whilst it works for some, it doesn’t work for most! Not everyone’s wired the same way.

The focus shouldn’t exclusively be on eliminating debt. Leverage is a powerful tool that should be employed for as long as practical to do more, than what you could otherwise accomplish. Keen to know more? Give us a call!